March 2004

Fall in Confidence about Business Conditions in the Local
Economy for the second and third quarters of 2004

According to the March 2004 Business Outlook Survey, there was a marked decline in business sentiment about future economic conditions in the local economy compared to expectations at the end of 2003. A net 50 percent of respondents expect general business conditions to get better over the next six months. This is down from 70 percent in the December 2003 survey. Meanwhile, with regard to own activity, a net 40 percent of reporting firms expect increased activity in the next six months compared to a net of 44 percent in December 2003. The drop in confidence about general business conditions was most evident in personal services, real estate, and construction.

The March 2004 survey indicated that about 52 percent of reporting firms experienced higher sales and about 20 percent experienced lower sales in the past six months compared to sales in the second and third quarters of 2003. The past six months witnessed limited improvement for wage earners as the percentage of firms indicating that they had increased employee compensation fell from 52 percent to 45 percent between the December 2003 and March 2004 surveys.

Summary of Returns
   March 2004

Survey Responses
Disaggregated by Sector/Activity

Summary:

The March 2004 Business Outlook Survey found that firms in the local economy are less optimistic about future business conditions compared to business sentiment at the beginning of 2004. The Business Outlook Index derived from the March 2004 survey dipped from its highest recorded level which occurred in December 2003 survey. This decline in sentiment marks a change in direction from the steady increase in business optimism that occurred between the March 2003 and December 2003 surveys. The most recent survey found that 55 percent of reporting firms felt that future business conditions are likely to improve while 5 percent indicated that conditions are likely to get worse. In comparison, the December 2003 survey found that 72 percent of the reporting firms anticipated improved business conditions while 2 percent expected worsening conditions.